LCA XIII NG for Transportation

8/10/2019 LCA XIII NG for Transportation

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National EnergyTechnology Laboratory

James LittlefieldBooz Allen HamiltonOctober 2, 2013

Improved Natural Gas Extraction as aStrategy for Reducing Climate Impactsof Transportation

LCA XIII, Orlando


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Technology Description LCA Boundaries Natural Gas Modeling Framework Co-product Management GHG Results Role of Reduced Extraction Emissions

Agenda


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Technological and economic advantages Can use growing domestic resource base of natural gas Upgrades economic value of natural gas by converting it to

transportation fuels Feedstock and product infrastructure are already in place

Commercial development has matured in last decade Two GTL projects in Qatar came online

Two domestic projects have been proposed (in Louisianaand Northeast U.S.) 1, 2

Favorable resource and technology characteristicsdrive commercialization of GTL

1 Office of the Governor Bobby Jindal: State of Louisiana. (2011). Gov. Jindal Announces Sasol Selected Calcasieu Parish as Location for Potential $8-10 Billion Gas-to-Liquids Complex. Retrieved on November 28, 2012, fromhttp://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=3022.2 Oil products plant considers adding GTL capacity. (n.d.). Oil and Gas Journal, 110, 14.


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GTL is one example of the advanced energytechnologies that NETL researches

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F-TSynthesis

Dehydration/Compression/HC Recovery

Liquid ProductSeparation

DistillateHydrotreating

NaphthaHydrotreating

WaxHydrocracking

HydrogenProduction

9

17

18

12

13

14Diesel Pool 21

CO 2 Removal

AqueousOxygenates

F-T LiquidsCO 2

1ZnO

PolishingPreformer Reformer

Natural Gas Syngas

FGFG

3

2

600#Steam to Preformer

Oxygen to Reformer

4Tail Gas Recycle

600#Steam to Steam Cycle

ToLights

Recovery16

Natural Gas

5

FG

15

10

7 8

Compressor

C4Isomerization

Alkylation

19

20

C5/C6Isomerization

Naptha Reforming

Gasoline Pool

22

FG to Lights Recovery




Alkylate

23

25High Pressure Steam to Steam Cycle

24Butane

Note: Block Flow Diagram is notintended to represent a completematerial balance. Only majorprocess streams and equipmentare shown.

Natural

Gas423,745

MMBtu/day(9,374

ton/day)

Butane499 tons/day

(used forgasoline

blending)

Diesel34,543bbl/day

Gasoline15,460bbl/day

Electricity40.8 MW

(979 MWh/day)

Catalytic reforming converts natural gas to synthesis gas Steam methane reforming increases hydrogen content in synthesis gas Liquid synthesis in low-temperature, slurry-bed Fischer-Tropsch reactor with cobalt catalyst 93% of CO2 is captured for sequestration (1,532 tons CO 2/day)


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Functional unit of 1 MJ of combusted diesel or gasoline (diesel shown here) Upstream natural gas is based on a detailed model GTL co-products are managed with displacement

GTL LCA boundaries include upstream anddownstream activities


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NETLs NG model is a network of flexible processes

Raw Material TransportRaw Material Acquisition

ProcessingExtraction

Gas CentrifugalCompressor

Valve FugitiveEmissions

Dehydration

Acid GasRemoval

ReciprocatingCompressor

ElectricCentrifugalCompressor

LiquidsUnloadingVenting/Flaring

WorkoversVenting/Flaring

Other PointSource Emissions

Venting/Flaring

Other FugitiveEmissions

Venting/Flaring

Venting/Flaring

WellConstruction

WellCompletion

Venting/Flaring

Other PointSource Emissions

Venting/Flaring

Other FugitiveEmissions

Valve FugitiveEmissions

Venting/Flaring

Venting/Flaring

Diesel

Steel

Concrete

Surface Water forHydrofracking

(Marcellus Only)

Transport of Waterby Truck

(Marcellus Only)

Flowback WaterTreated at a WWTP

(Marcellus Only)

Diethanolamine

Electricity

Flowback WaterTreated by

Crystallization(Marcellus Only)

Diesel

Electricity

Pipeline Operation(Energy &

CombustionEmissions)

Pipeline

Construction

SteelElectricity

PipelineOperation

(Fugitive Methane)

Concrete

WaterWithdrawal &

Discharge DuringWell Operation

DeliveredNatural Gas

Over 20 unique unit processes Bottom-up engineering calculations instead of top-down data Tunable to any natural gas extraction technology


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Parameters allow scenario and uncertainty analysisProperty (Units) Onshore Associated Offshore Tight Gas Barnett

Shale Marcellus

Shale CBM

Natural Gas Source

Contribution to 2010 U.S. Domestic Supply 22% 6.6% 12% 27% 21% 2.5% 9.4%

Average Production Rate (Mcf /day) low 46 85 1,960 77 192 201 73

expected 66 121 2,800 110 274 297 105

high 86 157 3,641 143 356 450 136

Expected EUR (Estimated Ultimate Recovery) (BCF) 0.72 1.32 30.7 1.20 3.00 3.25 1.15

Natural Gas Extraction Well

Flaring Rate (%) 51% (41 - 61%) 15% (12 - 18%)

Well Completion (Mcf natural gas/episode) 47 3,600 9,000 9,000 49.6

Well Workover (Mcf natural gas/episode) 3.1 3,600 9,000 9,000 49.6

Lifetime Well Workovers (Episodes/well) 1.1 0.3

Liquid Unloading (Mcf natural gas/episode) 3.57 n/a 3.57 n/a n/a n/a n/a

Lifetime Liquid Unloadings (Episodes/well) 930 n/a 930 n/a n/a n/a n/a

Valve Emissions, Fugitive (lb CH/ Mcf natural gas) 0.11 0.0001 0.11

Other Sources, Point Source (lb CH/ Mcf natural gas) 0.003 0.002 0.003

Other Sources, Fugitive (lb CH/ Mcf natural gas) 0.043 0.01 0.043

Natural gas extraction parameters include expected values and uncertainty ranges

Emission factors for unconventional wells and liquid unloading recently updatedbased on EPA revisions

Similar parameterization approach used for processing and transport


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NETLs NG model allows calculation ofupstream methane emissions

1 Allen, David T., et al. "Measurements of methane emissions at natural gas production sites in the United States." Proceedings of the National Academy of Sciences (2013): 201304880.

13.4 kg CH4 emissions per 1,000 kg of delivered natural gas and 165 kg NGL Applying mass allocation between co-products translates to a 1.26% loss of CH 4 per

unit of delivered natural gas

Comparable to results of a recent 190-well study completed by University of Texas 1

(both studies show ~0.5% extraction loss)


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Co-product management is necessary to calculateLCA results for individual GTL products

Allocation? Mass allocation not possible with electricity as a co-product Economic allocation is possible, but costs are relative and societal values reflected

by prices do not necessary indicate relative environmental burdens of co-products Energy allocation is possible, but useful energy in a unit of fuel is different than

useful energy in a unit of electricity

Displacement? Large scale energy systems can affect demand for competing products Unlike allocation, which severs links between GTL co-products and the energy

market, displacement considers broader consequences of co-production

GTL PlantNatural GasElectricityGasolineDiesel

Displacement is more appropriate than allocation for this analysis because the scale of theGTL system will affect conventional routes to fuel production.


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Co-product displacement requires modelingdecisions about type and extent of displacement

Co-Product Low Value Expected Value High Value

Electricity AEO 2035 U.S. Grid Mix

(671 kg CO2e/MWh) U.S. Grid Mix

(707 kg CO2e/MWh)Fleet Coal

(1,161 kg CO 2e/MWh)

Diesel No Displacement 100% Displacement of Diesel fromImported Crude Mix 100% Displacement of Diesel from Imported

Crude Mix

Gasoline No Displacement 100% Displacement of Gasoline fromImported Crude Mix 100% Displacement of Gasoline from

Imported Crude Mix

Diesel as functional unit GTL gasoline displaces conventional petroleum gasoline GTL electricity displaces average power produced by the U.S. electricity grid

Gasoline as functional unit GTL diesel displaces conventional petroleum diesel GTL electricity displaces average power produced by the U.S. electricity grid

Displacement value is inversely proportional to LCA result Low displacement corresponds to high LCA result High displacement corresponds to low LCA result


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NETLs petroleum baseline is basis for Renewable Fuel Standards (RFS) Expected life cycle GHG emissions from GTL fuels are close to petroleum baseline Uncertainty straddles petroleum baseline Fuel combustion is largest GHG contributor, but upstream natural gas matters too

GTL GHG results are comparable toNETLs petroleum baseline

90.6 89.4

-75

-50

-25

0

25

50

75

100

125

150

Diesel Gasoline

G H G E m i s s i o n s

( g C O e

/ M J f u e l c o m

b u s t e d

)

Natural Gas Extraction and Processing Butane Upstream Natural Gas Transport

GTL Plant Operation CO Pipeline Saline Aquifer SequestrationPower Displacement Fuel Displacement Fuel TransportFuel Combustion Total Petro Baseline, Diesel (90.0)Petro Baseline, Gasoline (91.3)


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Detailed results point to key contributorsDiesel Gasoline

90.6

72.7

0.4

-7.9

-3.6

0.3

0.4

1.6

7.8

3.8

15.2

-20 0 20 40 60 80 100 120

Total

Fuel Combustion

Fuel Transport

Fuel Displacement

Power Displacement

Saline Aquifer Sequestration

CO Pipeline

GTL Plant Operation

Natural Gas Transport

Butane Upstream

Natural Gas Extraction and Processing

E U

P T

E C F

R M T

R M A

GHG Emissions (g COe/MJ diesel combusted)

CO CH NO SF

89.4

72.6

0.4

-43.0

-8.5

0.7

0.8

3.7

18.3

8.9

35.4

-75 -50 -25 0 25 50 75 100 125 150

Total

Fuel Combustion

Fuel Transport

Fuel Displacement

Power Displacement

Saline Aquifer Sequestration

CO Pipeline

GTL Plant Operation

Natural Gas Transport

Butane Upstream

Natural Gas Extraction and Processing

E U

P T

E C F

R M T

R M A

GHG Emissions (g COe/MJ gasoline combusted)

CO CH NO SF

Displacement uncertainty is larger when gasoline is functional unit because GTL plant isoptimized for diesel production

Fuel combustion may be largest GHG contributor, but methane emissions from upstreamnatural gas represent greatest opportunity for improvement


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Final Oil & Gas Sector NSPS rule under CAA established August 16, 2012 Methane is a key component of the VOC category for the oil and gassector

Reduces emissions from some processes by as much as 95% Well completions and workovers

Centrifugal compressors Reciprocating compressors Storage tanks Pneumatic controllers

Does not regulate all upstream natural gas processes Liquid unloading Pipeline transmission

EPA New Source Performance Standards (NSPS)regulate VOC emissions from the oil and gas sector


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Reduced emission completions (RECs) for unconventional wells

Can reduce unconventional completion emissions by 95% (NSPS, 2012) New completion and workover emission factor = 9,000*(100% - 95%)

= 450 Mcf natural gas/episode A higher extraction flaring rate is also expected for RECs, so increase unconventional flaring rate from 15% to 51%

Replacement of compressor wet seals with dry seals Can reduce centrifugal compressor CH 4 emissions 95% (NSPS, 2012) New emission factor for centrifugal compressors (at processing site)

= 0.0069 kg CH4/kg natural gas compressed * (100% - 95%)= 0.00035 kg CH 4/kg natural gas compressed

Routine replacement of compressor rod packings Can reduce reciprocating compressor CH 4 emissions 95% (NSPS, 2012) New emission factor for reciprocating compressors (at processing site)

= 0.0306 kg CH4/kg natural gas combusted * (100% - 95%)= 0.00153 kg CH 4/kg natural gas combusted

Replacement of pneumatic controllers High bleed controllers have leak rates of 6 - 42 scf/hr (EPA, 2006b) Low bleed controllers have leak rates less than 6 scf/hr and are used by offshore gas wells (EPA, 2006b) New emission factor for onshore conventional and unconventional valves = existing emission factor for offshore

valves = 0.0001 lb CH4/Mcf

NETLs parameterized modeling approach canestimate the GHG changes caused by NSPS


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GTL diesel GHG emissions are reduced by 5.8% GTL gasoline GHG emissions are reduced by 13.9% Expected values are below baseline, but uncertainty still straddles baseline NSPS reduces upstream CH 4 losses from 1.26% to 0.83% (CH 4 emissions per unit of delivered natural gas)

NSPS implementation significantly reduces life cycleGHG emissions from GTL fuels

90.685.3 89.4

77.0

-75

-50

-25

0

25

5075

100

125

150

Current NSPS Current NSPS

Diesel Gasoline

G H G E m i s s i o n s

( g C O e

/ M J f u e l c o m

b u s t e d

)

Natural Gas Extraction and Processing Butane Upstream Natural Gas TransportGTL Plant Operation CO Pipeline Saline Aquifer SequestrationPower Displacement Fuel Displacement Fuel TransportFuel Combustion Total Petro Baseline - Diesel (90.0)Petro Baseline - Gasoline (91.3)


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Life cycle GHG emissions from GTL fuels are competitivewith those from petroleum fuels

Combustion of produced fuel is greatest contributor tolife cycle GHG emissions, but does not presentopportunities for GHG reductions

Tighter regulations on natural gas extraction can makeGHG emissions from GTL fuels lower than those frompetroleum fuels, but there is uncertainty

Co-product management contributes to uncertainty, withgreatest uncertainty when gasoline is the functional unit

Conclusions and Recommendations

Full report available at www.netl.doe.gov/energy-analyses (Analysis of Natural Gas-to-LiquidTransportation Fuels via Fischer-Tropsch, September 2013)
http://www.netl.doe.gov/energy-analyseshttp://www.netl.doe.gov/energy-analyseshttp://www.netl.doe.gov/energy-analyseshttp://www.netl.doe.gov/energy-analyses


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Supporting Material: Cost Parameters


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Supporting Material: Cost Analysis

Envelope of economicviability depends onnatural gas and dieselprices as well asreturns expected byinvestors

Window of viability

widens if capital costscan be reduced byleveraging technologydevelopment orcreating long-term

contracts for naturalgas

$54 $71 $88 $105 $121 $138 $155 $171 $188

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

$22

$65 $85 $105 $125 $145 $165 $185 $205 $225

N

a t u r a

l G a s P r i c e s

( $ / M M B T U

)

20% IRR

Supportive Economics

26% IRR

14% IRR

Prohibitive Economics

Market Conditionson 05/17/13

Diesel

ApproxBrent Crude

Price

LCA XIII NG for Transportation

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